In this article, you will discover:
- The risks of debt settlement
- If settlement stops creditor harassment
- If one can be sued during debt settlement
- Statute of limitations to sue
The debt settlement has a few risks. One of the risks is tax implications. The amount of debt that you did not pay will get a 1099, and you will be required to report it as income on your taxes. For more details about that, you will need to speak with an accountant.
Another risk of debt settlement is while you are having conversations, unless it’s a mortgage company, they have no requirements to stop moving forward in collections. Creditors could still call you or even file a lawsuit. This means you still need to watch out for what your creditors might do. Just because they are talking to you about debt settlement does not mean that they will not move forward with their usual protocol.
Will Debt Settlement Stop Creditor Harassment?
Sometimes if you are working with a law firm, collection agency, or creditor’s office, they will wait to see what the outcome might be. If you make an offer and the creditor has accepted your offer, then all collection and harassment should stop. If you have made an offer but it has not been accepted by the creditor or the creditor gives a counteroffer, then they could possibly continue to call and try to collect. While they should not be harassing you, it can often feel like they are. You do have rights if you feel like you are being harassed, because the collectors have rules and regulations that they must follow. The statute, Fair Debt Collection Practices Act, will protect you from harassing activities.
Can I Still Be Sued During The Debt Settlement Process?
There is nothing outside of some mortgage statutes that will stop a creditor from calling you, trying to collect from you, and possibly suing you if you are talking to them. In fact, if you tell them that you are planning to file bankruptcy, nothing is in place to stop them until you actually do file bankruptcy.
Is There A Statute Of Limitations For Being Sued For My Debt?
There is a statute of limitations for being sued for a debt. It is different depending on the type of debt it is. If you are being sued on something that was a written contract, here in the state of Illinois, they have ten years to file a suit against you. The ten years starts from the last payment or when they lent you the money. There is also an oral agreement, and that has a five-year statute of limitations. The time begins on oral agreements from the day you borrowed money, the last time you used the credit card, or from your last payment, whichever is most recent. As you see, depending on the type of debt that you have incurred, there are different statutes of limitations. This does not mean that you no longer owe debt, but they can no longer attempt to collect it.
Am I Still Eligible For A Debt Settlement Program If I’m Actually Being Sued?
Yes, you are still eligible for a debt settlement process if you are being sued. Instead of calling the creditor themselves, you would call an experienced debt settlement attorney to help you resolve it. The majority of lawsuits usually end in a settlement anyway.
For more information on Debt Settlement in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.